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Paying vs. waiting in the pursuit of specific egalitarianism

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  • Jeremy Clark
  • Bonggeun Kim

Abstract

We propose an allocation mechanism for publicly providing a private good such that the final allocation is independent of income yet increasing in strength of preference or need. The 'pay or wait' mechanism consists of offering the good for sale at two outlets. The 'queuing' outlet charges a low money price, but high waiting time per unit. The 'pricing' outlet charges a relatively high money price with rapid service. High wage individuals will opt for the pricing outlet, and low wage individuals the queuing outlet. If the policy maker stocks the outlets in proportion to the distribution of wage earners in the population, consumers of both wages will purchase the same amount on average, while those who value the good more relative to other goods will receive more of it. These outcomes are at risk if the good can be resold, but may be preserved if the policy maker can create transactions costs associated with resale. Copyright 2007 , Oxford University Press.

Suggested Citation

  • Jeremy Clark & Bonggeun Kim, 2007. "Paying vs. waiting in the pursuit of specific egalitarianism," Oxford Economic Papers, Oxford University Press, vol. 59(3), pages 486-512, July.
  • Handle: RePEc:oup:oxecpp:v:59:y:2007:i:3:p:486-512
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    File URL: http://hdl.handle.net/10.1093/oep/gpm004
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    References listed on IDEAS

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    1. Barzel, Yoram, 1974. "A Theory of Rationing by Waiting," Journal of Law and Economics, University of Chicago Press, vol. 17(1), pages 73-95, April.
    2. Bruce, Neil & Waldman, Michael, 1991. "Transfers in Kind: Why They Can Be Efficient and Nonpaternalistic," American Economic Review, American Economic Association, vol. 81(5), pages 1345-1351, December.
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    4. Boadway, Robin & Marchand, Maurice, 1995. "The Use of Public Expenditures for Redistributive Purposes," Oxford Economic Papers, Oxford University Press, vol. 47(1), pages 45-59, January.
    5. Jeremy Clark & Bonggeun Kim, 2006. "Differential Time and Money Pricing as a Mechanism for In-kind Redistribution," Working Papers in Economics 06/07, University of Canterbury, Department of Economics and Finance.
    6. Weitzman, Martin L, 1991. "Price Distortion and Shortage Deformation, or What Happened to the Soap?," American Economic Review, American Economic Association, vol. 81(3), pages 401-414, June.
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    8. Suen, Wing, 1989. "Rationing and Rent Dissipation in the Presence of Heterogeneous Individuals," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1384-1394, December.
    9. Holt, Charles A, Jr & Sherman, Roger, 1982. "Waiting-Line Auctions," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 280-294, April.
    10. Nichols, D & Smolensky, E & Tideman, T N, 1971. "Discrimination by Waiting Time in Merit Goods," American Economic Review, American Economic Association, vol. 61(3), pages 312-323, June.
    11. Blackorby, Charles & Donaldson, David, 1988. "Cash versus Kind, Self-selection, and Efficient Transfers," American Economic Review, American Economic Association, vol. 78(4), pages 691-700, September.
    12. Sah, Raaj Kumar, 1987. "Queues, Rations, and Market: Comparisons of Outcomes for the Poor and the Rich," American Economic Review, American Economic Association, vol. 77(1), pages 69-77, March.
    13. Blomquist, Suren & Christiansen, Vidar, 1995. " Public Provision of Private Goods as a Redistributive Device in an Optimum Income Tax Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 547-567, December.
    14. Alexeev, Michael & Leitzel, James, 2001. "Income distribution and price controls: Targeting a social safety net during economic transition," European Economic Review, Elsevier, vol. 45(9), pages 1647-1663, October.
    15. Boadway, R. & Marchand, M., 1990. "The use of public expenditures for distributive purposes," CORE Discussion Papers 1990066, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    Cited by:

    1. repec:eee:touman:v:33:y:2012:i:4:p:875-884 is not listed on IDEAS
    2. Jeremy Clark & Bonggeun Kim, 2006. "Differential Time and Money Pricing as a Mechanism for In-kind Redistribution," Working Papers in Economics 06/07, University of Canterbury, Department of Economics and Finance.

    More about this item

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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